Question 1

Retail sales data is an example of a:

Accepted Answer

A) leading indicator. 
B) lagging indicator. 
C) coincident indicator. 
D) goal of macroeconomic policy. 
E) countercyclical indicator. 
A) leading indicator. 
B) lagging indicator. 
C) coincident indicator. 
D) goal of macroeconomic policy. 
E) countercyclical indicator.

Question 2

Which of the following statements is incorrect regarding the Solow growth model?

Accepted Answer

A) Increases in living standards are not necessarily guaranteed in an economy. 
B) The optimal saving rate is achieved when saving per person is maximised. 
C) The optimal saving rate is achieved when consumption per capita is maximised. 
D) The optimal saving rate is derived under the assumption that technology is constant. 
A) Increases in living standards are not necessarily guaranteed in an economy. 
B) The optimal saving rate is achieved when saving per person is maximised. 
C) The optimal saving rate is achieved when consumption per capita is maximised. 
D) The optimal saving rate is derived under the assumption that technology is constant.

Question 3

The endogenous growth model suggests that technological progress in an economy:

Accepted Answer

A) may lead to further improvements in technology. 
B) occurs randomly. 
C) is not as important as suggested in the Solow growth model. 
D) depends crucially on the level of consumption. 
E) is all of the above. 
A) may lead to further improvements in technology. 
B) occurs randomly. 
C) is not as important as suggested in the Solow growth model. 
D) depends crucially on the level of consumption. 
E) is all of the above.

Question 4

Changing the long-term growth trajectory includes:

Accepted Answer

A) microeconomic and macroeconomic policies. 
B) only macroeconomic policies. 
C) only microeconomic policies. 
D) only normative economic policies. 
A) microeconomic and macroeconomic policies. 
B) only macroeconomic policies. 
C) only microeconomic policies. 
D) only normative economic policies.

Question 5

The point at which real output reaches a maximum during a business cycle is called the:

Accepted Answer

A) depression. 
B) recession. 
C) recovery. 
D) trough. 
E) peak. 
A) depression. 
B) recession. 
C) recovery. 
D) trough. 
E) peak.

Question 6

A phase in the business cycle in which the decline in the economy's real GDP persists for at least half a year is known as:

Accepted Answer

A) a depression. 
B) a recession. 
C) a downtick. 
D) disequilibrium. 
E) limited demand. 
A) a depression. 
B) a recession. 
C) a downtick. 
D) disequilibrium. 
E) limited demand.

Question 7

Which of the following statements best represents the impact of technological progress in the Solow growth model?

Accepted Answer

A) There must be increases in the quality and quantity of consumption for long-term growth to be achieved. 
B) Technological progress is necessary to achieve the steady-state level of consumption per worker. 
C) There must be increases in the quality and quantity of capital for long-term growth to be achieved. 
D) Technological progress allows for an increase in the saving rate. 
A) There must be increases in the quality and quantity of consumption for long-term growth to be achieved. 
B) Technological progress is necessary to achieve the steady-state level of consumption per worker. 
C) There must be increases in the quality and quantity of capital for long-term growth to be achieved. 
D) Technological progress allows for an increase in the saving rate.

Question 8

Suppose the index of leading economic indicators begins to decline for several months.Which of the following economic events will likely follow?

Accepted Answer

A) A recession. 
B) Severe inflation. 
C) Greater employment. 
D) Higher investment. 
A) A recession. 
B) Severe inflation. 
C) Greater employment. 
D) Higher investment.

Question 9

Endogenous growth theory tries to highlight the importance of capital and labour at the expense of technological progress.

Accepted Answer

A) True 
 B)False

Question 10

Reducing business cycle fluctuations is an important goal of macroeconomic policy because it:

Accepted Answer

A) allows inflation to be zero. 
B) keeps output constant. 
C) keeps unemployment at zero. 
D) helps keep inflation low. 
E) helps keep unemployment high. 
A) allows inflation to be zero. 
B) keeps output constant. 
C) keeps unemployment at zero. 
D) helps keep inflation low. 
E) helps keep unemployment high.

Question 11

Government intervention may be necessary for an economy to increase its living standards in the long run.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is true?

Accepted Answer

A) The GDP gap is the difference between nominal GDP and real GDP. 
B) Economic growth is needed because it reduces the nation's standard of living. 
C) Economic growth is measured by the annual percentage increase in a nation's real GDP. 
D) Economic growth is required to reduce the value of net exports. 
A) The GDP gap is the difference between nominal GDP and real GDP. 
B) Economic growth is needed because it reduces the nation's standard of living. 
C) Economic growth is measured by the annual percentage increase in a nation's real GDP. 
D) Economic growth is required to reduce the value of net exports.

Question 13

The Solow growth model explains:

Accepted Answer

A) how consumption, saving, capital, labour and technological change combine in the short term to determine economic growth. 
B) how consumption, saving, capital, labour and technological change combine in the longer term to determine economic growth. 
C) how history changes economic growth. 
D) how net exports determine economic growth. 
A) how consumption, saving, capital, labour and technological change combine in the short term to determine economic growth. 
B) how consumption, saving, capital, labour and technological change combine in the longer term to determine economic growth. 
C) how history changes economic growth. 
D) how net exports determine economic growth.

Question 14

The Solow growth model is based on holding labour and capital constant,but increasing technological progress.

Accepted Answer

A) True 
 B)False

Question 15

A goal of macroeconomic policy should be to _____ business-cycle fluctuations in an economy.

Accepted Answer

A) increase 
B) reduce 
C) ignore 
D) encourage 
A) increase 
B) reduce 
C) ignore 
D) encourage

Question 16

According to the Solow growth model,the only way for a country to enjoy long-term economic growth is through:

Accepted Answer

A) increasing saving to the optimal steady-state level. 
B) maximising consumption per worker. 
C) technological progress. 
D) increasing the quantity of capital per worker. 
A) increasing saving to the optimal steady-state level. 
B) maximising consumption per worker. 
C) technological progress. 
D) increasing the quantity of capital per worker.

Question 17

The trough is good news because:

Accepted Answer

A) it is the middle of the expansion phase of the business cycle. 
B) production is at the highest level. 
C) unemployment is low. 
D) it is the starting point to improve economic conditions. 
A) it is the middle of the expansion phase of the business cycle. 
B) production is at the highest level. 
C) unemployment is low. 
D) it is the starting point to improve economic conditions.

Question 18

The level of GDP that could be produced at full employment is:

Accepted Answer

A) aggregated GDP. 
B) desirable nominal GDP. 
C) potential real GDP. 
D) unattainable. 
E) potential nominal GDP. 
A) aggregated GDP. 
B) desirable nominal GDP. 
C) potential real GDP. 
D) unattainable. 
E) potential nominal GDP.

Question 19

Macroeconomic policies should:

Accepted Answer

A) reduce the severity of the ups and downs of the business cycle. 
B) encourage the economy to grow very fast. 
C) enable the economy to achieve the highest possible unsustainable long-term economic growth. 
D) encourage the economy not to grow in the long run. 
A) reduce the severity of the ups and downs of the business cycle. 
B) encourage the economy to grow very fast. 
C) enable the economy to achieve the highest possible unsustainable long-term economic growth. 
D) encourage the economy not to grow in the long run.

Question 20

The rate of saving that produces the maximum level of consumption per capita in the long-run steady state is called the:

Accepted Answer

A) marvellous rate of saving. 
B) golden rule of saving. 
C) maximum rate of spending. 
D) optimum rate of spending. 
A) marvellous rate of saving. 
B) golden rule of saving. 
C) maximum rate of spending. 
D) optimum rate of spending.

Retail sales data is an example of a:

Which of the following statements is incorrect regarding the Solow growth model?

The endogenous growth model suggests that technological progress in an economy:

Changing the long-term growth trajectory includes:

The point at which real output reaches a maximum during a business cycle is called the:

A phase in the business cycle in which the decline in the economy's real GDP persists for at least half a year is known as:

Which of the following statements best represents the impact of technological progress in the Solow growth model?

Suppose the index of leading economic indicators begins to decline for several months.Which of the following economic events will likely follow?

Endogenous growth theory tries to highlight the importance of capital and labour at the expense of technological progress.

Reducing business cycle fluctuations is an important goal of macroeconomic policy because it:

Government intervention may be necessary for an economy to increase its living standards in the long run.

Which of the following is true?

The Solow growth model explains:

The Solow growth model is based on holding labour and capital constant,but increasing technological progress.

A goal of macroeconomic policy should be to _____ business-cycle fluctuations in an economy.

According to the Solow growth model,the only way for a country to enjoy long-term economic growth is through:

The trough is good news because:

The level of GDP that could be produced at full employment is:

Macroeconomic policies should:

The rate of saving that produces the maximum level of consumption per capita in the long-run steady state is called the:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 12: Business cycles and economic growth

Retail sales data is an example of a:

Which of the following statements is incorrect regarding the Solow growth model?

The endogenous growth model suggests that technological progress in an economy:

Changing the long-term growth trajectory includes:

The point at which real output reaches a maximum during a business cycle is called the:

A phase in the business cycle in which the decline in the economy's real GDP persists for at least half a year is known as:

Which of the following statements best represents the impact of technological progress in the Solow growth model?

Suppose the index of leading economic indicators begins to decline for several months.Which of the following economic events will likely follow?

Endogenous growth theory tries to highlight the importance of capital and labour at the expense of technological progress.

Reducing business cycle fluctuations is an important goal of macroeconomic policy because it:

Government intervention may be necessary for an economy to increase its living standards in the long run.

Which of the following is true?

The Solow growth model explains:

The Solow growth model is based on holding labour and capital constant,but increasing technological progress.

A goal of macroeconomic policy should be to _____ business-cycle fluctuations in an economy.

According to the Solow growth model,the only way for a country to enjoy long-term economic growth is through:

The trough is good news because:

The level of GDP that could be produced at full employment is:

Macroeconomic policies should:

The rate of saving that produces the maximum level of consumption per capita in the long-run steady state is called the:

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters